The spring 2025 economic forecast includes a special-topic report titled 'Business adjustment to tensions in foreign markets: survey evidence,' offering a comprehensive overview of how European firms are responding strategically to growing global trade fragmentation, policy disruptions, and shifting geopolitical dynamics. Based on harmonised ad hoc business and consumer surveys conducted in February-March 2025, the report also analyses the impact of selected external and domestic factors on consumer sentiment across the EU.

The business survey, covering 44 000 firms across 12 Member States, reveals that 27 % of externally exposed companies have already adapted or plan to adapt their sourcing, production, or market strategies. The most cited adjustment was changing trade partners (38 %), followed by raising buffer stocks (22 %) and relocating operations – with a preference for friendshoring over reshoring. These changes are more common in the manufacturing sector, which is most deeply embedded in global value chains.

Despite anticipated shifts, only 38 % of firms expect higher operational costs, and fewer (31 %) expect to raise final prices, suggesting a cautious pass-through to consumers and potential pressure on profit margins. Adjustments like digitalisation and vertical integration were notably common in services.

On the consumer side, data from 13 EU countries show that inflation and cost of living remain the top concerns across all demographic groups –even as inflation stabilised at 2.4 % in March 2025. Other key negative influences include global developments, domestic political uncertainty, and climate policy. Technological change, however, is broadly viewed as a positive economic factor, particularly among younger and higher-income respondents.

The results provide evidence of growing divergence in firm-level resilience strategies and underline the importance of socio-demographic context in shaping economic perceptions – critical insight for policymakers seeking to bolster EU competitiveness and consumer confidence.